News

by Mike Masnick


Filed Under:
bob pisano, censorship, coica

Companies:
mpaa



MPAA Boss Defends Censorships With Blatantly False Claims

from the weak dept

A bunch of folks sent over MPAA interim CEO Bob Pisano's incredibly misleading defense of the COICA censorship bill written recently for TheHill.com. It's amazing how many misleading or outright false statements Pisano was able to fit into a single piece but it's a testament to the level to which the MPAA must go through to support its plan for internet censorship:
They're called rogue sites, and they exist for one purpose only: to make a profit using the Internet to distribute the stolen and counterfeited goods and ideas of others.
Lovely misleading way to open the piece. In fact, many of the sites the MPAA has declared as "rogue" are nothing more than online forums. Some of them, yes, do involve people pointing each other to where they might obtain unauthorized copies of movies, but it's overly dramatic (though, hardly Oscar-worthy) to claim that the only purpose they serve is to profit from "the stolen and counterfeited goods and ideas of others." First of all, you can't steal an idea and I'm not sure how one downloads a counterfeit good.
The economic impact of these activities -- millions of lost jobs and dollars -- is profound.
Actually, the economic impact of those activities appears to be profound... but in the other direction. Recent independent research on the impact of weaker copyright laws has shown that it has helped increase the dollars flowing in the industry, not decrease it. Meanwhile, the studies that the MPAA relies on (which it helped finance) have been debunked by the US government itself.
That's why dozens of labor organizations and business groups have come together to support legislation to provide the Justice Department with new enforcement tools to combat this growing menace to the American economy.
The reason why those groups have all come together is because they're looking for the government to protect an obsolete business model. The labor organizations and business groups mentioned all have a rather long history of relying on government protectionism rather than being willing to compete in the free market. So it comes as no surprise that they wish to continue to get greater protectionism rather than face the realities of the marketplace, where they would have to actually innovate to compete.
These sites take many forms, and their operators are located throughout the world. They have in common one characteristic: They materially contribute to, facilitate and/or induce the illegal distribution of both stolen lawful products, such as movies and television programs, as well unlawful ones, such as counterfeit goods, including prescription medications.
Note two neat little (and extremely misleading) tricks by Pisano here. First, he is blaming the sites themselves rather than the users of the sites. It's the entire key to getting COICA approved. Pretend that the users of the site and the site itself are the same thing. It's a lie.

Second, he tosses in the claim about prescription medicines. This is one of the older tricks in the entertainment industry's playbook. When they know their argument is weak when it comes to their content, conflate the issue with fake medicines to make it sound scary. Of course, the issue of fake medicines is entirely different than unauthorized file sharing. Lumping the two together is in ridiculously poor taste and incredibly misleading.
Bipartisan congressional efforts to crack down on these operations are opposed by groups who claim the First Amendment protects the rights of these sites to use the Internet for their illegal practices. But the First Amendment was not intended as a shield for those who steal, irrespective of the means. Theft is theft, whether it occurs in a dark alley or in the ether, and to attempt to distinguish the two is to undermine the most basic tenets of our criminal laws.
There are so many things wrong with this paragraph, and it is so incredibly misleading, that I'm not even sure where to start. Theft may be theft, but copyright infringement is not theft. Pisano could have said that the First Amendment was not intended as a shield for copyright infringement, and he would have been slightly more accurate, but still missing the point. That's because, once again, Pisano is falsely and misleadingly claiming that these sites themselves are infringing on the content. They are not. Users of those sites may be pointing others to places they can go, which could potentially infringe, but that is quite different.

What the First Amendment does protect is speech. The law does already allow takedowns of infringing content. But COICA goes beyond that. Rather than -- as the First Amendment requires -- narrowly tailoring any takedown or injunction to the actual infringing content, it orders the entire site taken down prior to any trial. That's a classic situation of prior restraint, where the specifically infringing content is not specified and narrowly taken down. Instead, it's using a shotgun to try to remove a bandaid.
According to a study by the International Intellectual Property Alliance, in 2007 more than 11.7 million people were employed by copyright industries in the U.S. This amounted to 8.51 percent of the U.S. workforce. In other words, in 2007 these industries added $1.52 trillion to the economy, or 11.05 percent of the GDP.
This is one of the more ridiculous and regularly debunked studies out there. First of all, the IIPA study lumped together all kinds of people, who are not actually creating "intellectual property," and put them all in this big bucket defined as "copyright industries." The false assertion here is that these jobs would not exist but for copyright. That is simply not true. In fact, many of the people and companies included in "the copyright industries" include those like open source software companies, who are (for the most part) not relying on copyright law.

To further debunk these statements, if you took the exact same methodology and looked at what it meant for those industries that rely on exceptions or a lack of copyright laws, you find that they represent a much larger percentage of the US workforce and GDP. In other words, if we are to take the MPAA's claim here that the IIPA's numbers are correct, then it means that we should be doing away with copyright, since the industries that rely on ignoring copyright law are much bigger and contribute more to the economy.
The American intellectual property community creates well-paying jobs, provides and funds pension and healthcare plans and increases tax revenues to cities and towns across the nation. In my industry alone, millions of carpenters, electricians, set designers, caterers, costume designers and others bring home paychecks because of their roles in making movies and television programs.
Again, note the misleading claim. The argument is that without protectionism such jobs would not exist. This is false. Industries that don't rely on copyright create all those same things -- in fact, more, according to the evidence Pisano himself cited. And, the silly appeal about carpenters, electricians, set designers, caterers and costume designers pre-supposes that without this law they are out of work. That's a false claim. Considering that we keep seeing more and more filmmakers thriving while embracing the very sites that the MPAA seeks to shut down, it suggests that those people are not, in fact, at risk from these sites.

Realistically, the only people "at risk" from such sites are those who choose not to adapt. And that's mainly made up of the members of the MPAA.
Rogue websites threaten the heart of our industry and the livelihoods of the people who give it life. These sites do not represent a problem that lies on the far horizon. They are here now, and they are here in volume.
And for those who have embraced them, they represent a huge opportunity.

What's scary is that there are still people, and people in power, who will believe Pisano's blatantly false and misleading claims here and will push forward in favor of government censorship of websites, contrary to the very clear rules of the First Amendment. In the end, it's hard to see how COICA would pass even a rudimentary First Amendment review -- as more and more First Amendment experts are noticing.

It's really quite distressing the level of blatant falsehoods that the MPAA will spew in favor of getting the US to become a regime of censorship.

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  1. icon
    PaulT (profile), 20 Nov 2010 @ 12:32am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: COICA

    "Well, to effectively compete with free copies of their own music, I'd imagine they would have to give away their music for free"

    Incorrect. Note that I'm talking about sites like mp3fiesta, not "pirate" sites. Sites like that are *paid* services - take a look, $0.20-$0.40/track or monthly/yearly subscriptions from what I see. These sites operate under loopholes in Russian law that mean that sites do not have to make prior contract agreements before selling copyrighted material. Therefore, they're not beholden to the wishes of the labels, and can sell at whatever price and whatever terms they wish.

    So, why would a customer choose to pay for this service rather than iTunes or downloading illegally? Well, paying for the product gives the illusion that it's OK and overcomes the moral issues some people have about "piracy". But, check out the service they offer - a wide catalogue (Led Zep included, which doesn't happen with "legal" services), decent prices (many people believe iTunes is vastly overpriced, especially outside the US), high quality files (FLAC included on some sites like this, but not on any legal mainstream service), no regional restrictions or windowing etc.

    As with any illicit activity, if enough people do it, you can't shut it down at the supply end. You have to address the demand. Low prices, high quality, wide choice, no restrictions - there is no mainstream legal service that offers these qualities. Offer them, and the illegal services offering them no longer have a market - who is going to pay an illicit Russian site when they can get the same thing from iTunes?

    The issue of free music is another issue altogether,and a red herring for this discussion. But, since you insist:

    "If a label/movie studio did the same, they would earn money, but not nearly enough to support their true business model, i.e., investing millions in movies and music in order to earn a profit great enough to support that project, the next project, and overhead."

    This is why you, and people like you fail. You have no imagination. The way to compete with "free" is not to copy the business models they are using. It's to offer the customer more, so that they are willing to pay the price requested. Mike already talks about this extensively - basing your business on finite goods (physical merchandise, limited editions, concerts, etc.) that encourage people to pay, rather than infinite goods (the recording) that you can get for free. Some people will still pay for the recording, but there's less incentive to do so.

    By concentrating on ad revenue, you've already made your first mistake. There's literally thousands of ways to make money within the music industry that have nothing to do with advertising or trying to shift content. That's fine, because the potential profit margin on those goods and services are usually much higher than selling a copy of a CD. There's just no "one size fits all" model, and you can't depend on selling digital files because they have little intrinsic value. Give people goods or services worth paying for, and they will. Offer them a *lower* level of service than the "pirates" (which is what legal services currently do), and you incentivise people to use the "pirates".

    As for the "millions" it takes to produce some things, maybe that's part of the problem. Go to any breakdown of the making of a major blockbuster movie or album, and you'll find amazing examples of extravagance and waste. Most major labels and studios also have a way of inflating their reported budgets so that they don't have to pay royalties - most productions cost less than you'd think, and large chunks of the costs don't need to be there. It's a little dated, but Steve Albini's classic article is a good place to start: http://www.negativland.com/albini.html

    Instead of whining, the record industry needs to do what every other industry has needed to do when faced with game changing issues - cut costs and adapt. The same with the movie industry - does the latest movie really need to be 2 1/2 hours long and cost $200 million? Quite often the answer is no.

    "I'm no expert, but classifying infringement as "competition" seems completely unsustainable."

    Here's the thing that so many people in the industry have never seemed to understand - there has ALWAYS been infringement, ALWAYS will be. Nobody pays for radio, which gives you potentially infinite music to listen to. I remember as a kid recording the chart show on to tape from the radio and editing it to make mixtapes for me and friends to listen to. I copied albums from the library, from friends. I never paid for any of this.

    But, you know what? I still PAID for music. I bought merchandising, bought albums, bought concert tickets, etc. If you only look at one part of the market (the recording), then of course P2P appears to affect things, but you have to consider the whole thing. P2P makes it easier to infringe, but it's always been happening. "Stolen" music on things like mixtapes and borrowed/copied CDs formed the bedrock of the music industry I grew up with - and that was the early 90s before the modern internet even existed.

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